Assistance in a tax audit

What is a tax audit?

A tax audit is the set of procedures by which the authorities check that your returns are accurate. For a company it can take several forms:

• Desk review (contrôle sur pièces), carried out from the authorities’ offices on the basis of your returns and requested documents.
• Request for information or justification, inviting you to explain or document a specific point.
• Accounting audit (vérification de comptabilité), announced by an audit notice, which examines your books and supporting documents, in principle on site.

These procedures may lead to a proposed adjustment: the authorities set out the reassessments they envisage and their grounds.

Who is concerned?

Any business liable to VAT in France, including a foreign company without a French establishment that is registered there. Intra-EU transactions, exemptions, VAT credit refunds and deduction claims are regularly examined. For a foreign company the difficulty is twofold: replying to a letter in French, with short deadlines, without a local team.

Rules and rights to know

The charter of rights and obligations of the audited taxpayer, published by the French tax administration (DGFiP), sets out the essentials (see the audited taxpayer charter (in French)):

• You may be assisted by an adviser from the first intervention.
• The audit notice states the nature, purpose and period of the audit.
• In an accounting audit, the dialogue rests on an oral and adversarial debate.
• You have 30 days to reply to a proposed adjustment, extendable by a further 30 days on request.
• For small businesses, the on-site audit is in principle limited to three months, with exceptions.
• Remedies exist in case of disagreement: hierarchical appeal, departmental contact, referral to the tax commission on questions of fact.

Another benchmark: for VAT, the authorities may in principle adjust until the end of the third year following the year in which the tax became chargeable, with extensions in certain cases (BOFiP, VAT reassessment period, in French).

How we assist you, step by step

Common mistakes in an audit

• Replying too fast, without having found the supporting documents, then contradicting yourself.
• Not requesting an extension of the reply period when it is possible.
• Providing documents unrelated to the period or purpose of the audit.
• Neglecting exemption evidence: see our article on proof of intra-EU supplies.
• Ignoring the financial consequences: see our article on penalties and late-payment interest.

What Hanoutax does, and its limits

• Analysis of the request or audit notice received.
• Gathering the documents and evidence requested.
• Drafting replies to the authorities.
• Exchanges with the auditor or the relevant office, under the mandate.
• Analysis of proposed adjustments and reply options.

Hanoutax acts as a mandatary: we do not give legal advice and guarantee no outcome. For a complex dispute, we refer you to a tax lawyer and pass on the prepared file.

FAQ

Informational content, which does not constitute legal advice. The rules that apply depend on your situation.